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tv   [untitled]    December 31, 2014 10:00am-10:31am PST

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and lead active, healthy life styles that are going to just stay with them for life. ♪ . >> good morning, everybody, welcome to the san francisco board of supervisors budget and finance committee meeting for wednesday, december 10, 2014. my name is mark farrell, i will be chairing this committee, i am joined by supervisor john avalos and will be joined in a moment by supervisor eric mar i want to thank bill dillon and
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jack chin as well as the clerk of the xlit linda wong. >> please silence cell phones and electronic devices, completed speaker cards and any documents to be xlud as part of the file should be 134i9ed to the clerk. items today will appear on the december 16 board of supervisors agenda unless otherwise stated. >> we have a relatively long agenda today, this is the last budget meeting before the end of the year, 24 items, i believe. we're going to take a few out of order but let's get started. call 1 and 2 first. >> item 1, aerd napbs appropriating 1.3 million to the recreation and park department for the costs associated with hosting the pga world gauchl championship tournament at t36789c harding park golf course. item 2, resolution approving and authorizing the execution of a fourth amendment to the master tournament agreement with pga tour for the use of harding park golf course for a mere yud
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ending 2025 which will result in a value not to exceed $26.8 million. >> i'm patricia we're going to tag team you today, tom heart of our property management division will speak to the resolution approving the master tournament agreement amendment. so i'm here this morning to ask for the committee's approval of a supplemental appropriation ordinance in the amount of 1.3 million dollars. to fund costs with hosting a match play tournament at harding park golf course in april of 2015. the source for the supplemental is a reimbursement from the pga tour. the department estimates it will cost us approximately $800,000 to host the tournament, including $540,000 in salary and fringe benefits and
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$260,000 in materials and supplies. additionally we expect to lose approximately $500,000 in revenue while the golf course is closed for 3 weeks prior to and during the tournament. the scope of the work that the department will undertake to prepare for the tournament includes rebuilding all 9 bunkers on fleming golf course, resodding the practice practice range at fleming, weed removal, kikuyu grass removal, fair which top dressing, overseeding as well as expensive tree work on both harding and fleming. the week of the tournament itself we anticipate that the harding gardening crew will work 330 hours of overtime every day, hand watering, repairing damage from the day's play and moving holes. after the tournament our gardeners will restore areas of the golf course that have been
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affected by the pga tour's hospitality facilities. under the master tournament agreement, the pga tour will reimburse the city up to 1.3 million dollars to host these costs -- to fund the costs of hosting the tournament and will repay the revenue lost. we have hosted a series of successful tournaments at harding park in the last 10 years and we expect the april event to be another one and i'm happy to answer questions. >> thank you. no questions at this point. do you want to move on to mr. heart or our budget analyst? >> why don't we do both items at the same time. >> good morning, supervisors, my name is tom heart, representing the recreation and park department to request approval of the fourth amendment to the master tournament agreement between the city and the pga tour. since signing the original agreement in 2002 and the first pga tour event, the american
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express championship, the renovated harding park golf course has reclaimed worldwide recognition as one of the finest public golf courses. the recreation and park department and the pga tour have continued to work in partnership to not only bring high level golf competition to harding park but to continue the all-important task of buildinging the harding park brand in the world golf marked while always assuring that the residents of san francisco have more than equal access to the course and are always assured of the lowest rates we have been able, through expert leadership of the tpc network and pga agronomy guidance to continue to develop and grow the golfing experience at harding park. this past july a very important announcement was made to the world media here in city hall that harding park will be the site of the 2015w cadillac match play, the 20 twepbltd
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championship and the 2025 president's cup. the agreement between the city and pga of america for the 2020 championship is currently being finalized and will be brought to you within the next couple of months. today i'm here with the details of the fourth amendment of the master tournament agreement with the pga tour. the amendment calls for a guarantee of the 2015wgc cadillac match play and the 2025 president's cup. each of these two events carry a penalty payment assuring the city that if they are not played we are paid $1 million per event. additionally we could also receive up to 3 events between 2016 and 2018 and one event between 2021 and 2023. if all of the events are held at harding park, the recreation and park department could receive up to $6.8 million. since 2002 the department has negotiated site fees from
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$250,000 to $1.1 million with the 2025 president's cup at $1,375,000. all of these fees are subject to cpi increases as well. since first hosting a pga tour event at harding we have grown tremendously as a staff both on course and in the clubhouse to successfully host such events and we are very excited to accept the rare opportunity to once again show off harding and san francisco to the world. the wgc cadillac match play coverage is expected to reach 800 million households in 224 countries and 31 languages outside the united states. stephanie mckneel from the pga tour is here to make a couple comments and i will be glad to answer any questions you might have. >> thank you, mr. heart. >> good morning, supervisors, i am stephanie mcneil, i am the
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general manager for the pga tour based here in san francisco. we are happy to extend our partnership with the city and county of san francisco through 2025. harding park is a great facility and the world's best golfers consider it one of their very favorites. we look forward to april as we showcase harding park and san francisco to the world through the wgc cadillac match play. thank you. >> thanks very much. colleagues, if no questions at this time, mr. rose, can we go to your report on 1 and 2. >> mr. chairman, members of the committee, initially let me comment the department stated they would receive 6.aigtd million dollars if all the tournaments are held. i think what the department meant was they would be reimbursed for rpd's costs, not that there would be additional revenues to the city and i want to clarify
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that. if i'm mistaken the department can correct me. on page 6 we note that under the proposed resolution, that is the 141150, the rpd is to receive reimbursement from the pga tour for maintenance and labor costs and payment for lost revenues in amount ranging from up to 1.1 million to 1,375,000, depending on the event as shown in table 2 on page 7 of our report. in addition, rpd is to receive a percentage of pga tour event gross operating revenues over a certain threshold that varies by event and that's shown in table 2. on page 9 of our report at the top we note that the master lease agreement and proposed fourth amendment require the pga tour to reimburse the rpd for expenditures within 45 days of receiving voices from the rpd, however the national lease agreement and proposed foerlgtd
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agreement do not specify by when the rpd must submit such invoices. again on page 9 we state that as shown in table 2, the rpd can receive percentage repbltd of pga tour gross operating revenues over certain threshold, depending on the event. however, the hpd has never received percentage revenues from pga tour gross operating revenues at harding tour. the rpd encouraging on-going costs to maintain pga standards but does not receive revenues other than direct reimburses for costs as miss patricione just stated to you. in addition while harding park is responsible for expenses, golf is insufficient 4,961,627 in fiscal year 14-15 and
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supervisors that includes an estimated 2.4 million dollars for the deficit at harding park we just received that information this morning, a 2.4 million dollar projected deficit. so the budget and legislative analysts ofrs considers approving the fourth amendment and the proposed supplemental appropriation to be a policy matter for the board of supervisors since the city only recovers the costs of maintaining harding park and payment for lost revenues and because the city has never received percentage revenues from the pg did a tour event from the gross operating revenues. our recommendations are to amend the proposed resolution to require rpd to submit invoices to the pga tour within 60 days of the pga tour event and as i stated we consider approval of this legislation to be a policy matter for the board of supervisors. >> thank you, mr. rose. supervisor avalos. >> mr. rose, i'm more of a bowler than a golfer but aren't
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you laying it on kind of thick? >> i'm sorry. >> your report sounds a little bit heavy-handed against the pga tour lease. just my -- i actually find you to be very objective in your approach and i would like to think that you would say you're being objective now. >> i am absolutely 100 -- i always am objective and will continue to be objective. without question. >> i'm not questioning your objectivity. i'm just concerned that you -- what's the overall take on the golf on a yearly basis, the golf was underfunded? did you express that this your report? >> yes, what i stated wasu supervisor avalos, that if you take all the golf courses combined according to rpd they have an estimated projected deficit of about $5 million dollars, close to $5 million dollars in fiscal year 14-15,
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which includes, supervisor, a projected deficit just for harding park of 2.4 million. >> so one thing i notice in your report you mentioned that the percentage of revenues that rec and park golf fund is able to receive from the pga tour has never been enacted. we haven't received any percentage of revenues. >> it's never been effected for the simple reason that the threshold is too high. the threshold was always unrealistic. and let me just say, supervisor, in retrospect i think that our office should have probably made a recommendation to decrease the threshold so that the rec and park would at least get some portion, some amount, of the percentage revenues instead of just getting reimbursement of the costs for the maintenance and the lost golf revenues. >> you know, i was kind of surprised that you hadn't done
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that. >> i agree with you. miss campbell and i have discussed this and we feel somewhat remiss in that we have not made that recommendation. >> mr. rose, your understanding are all the parks, all the golf courses the same in the city? >> in terms of deficits? >> in terms of maintenance, in terms of glorification? >> no, my understanding is this one is different in that the --. >> beautification. >> the maintenance is done in house by the rec and park staff. in some instances we have a manager of a golf course which would be responsible for the maintenance. >> okay, i know that glen eagle, we recently had the glen eagle golf course before us recently and it seemed that there wasn't quite as large a subsidy for the glen eagles golf course as there was for the harding park golf course. is that correct? >> i don't recall the
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estimated deficit, i'm sure the department could tell you. >> that's a lease compared to -- it's under rec and park direct jurisdiction so it's a lease or agreement with whoever --. >> correct. now the other thing here in this particular golf course, what we have here is the pga has very high standards for maintenance and that's one of the things that's driving the deficit up. although we get reimbursed for those costs we must maintain this golf course at a very high level. >> uh-huh, okay. do you feel that money's left on the table in this? >> as i stated, i think that we, in our discussions yesterday and this morning about this item we felt that the department should get at least some portion, some percentage revenues. let me
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also comment on this. there are arguments out there that as a result of holding these tournaments in san francisco that this is a boone to the san francisco economy. for example, more people stay at hotels, more people eat at restaurants. however, there has never been any documentation provided to us that shows what the multiplier effect is. as we all know, in san francisco hotels are booming in san francisco. so that whether or not we have -- whether we have a tournament or not it is not clear that we would lose any revenues if we didn't have the tournament. but we have not seen any evidence of that in writing in a written report. >> thank you. much like we might say, we saw with the america's cup, we had a report that it was going to generate 1.4 billion dollars in overall economic activity and we saw that it actually didn't come in anywhere near that and we were told there would be part of our teams that would be part of the america's cup tournament and we
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didn't see that happen and the actual cost to the city was much more than was predicted and that is typically what happens over and over and over again when we have these big events. this is not quite as big as the america's cup so these are my concerns. i really appreciated your report honing in on those. i think we have to look at what the cost to the city is and if the benefits outweigh the costs napbld this -- and in this case if we don't have strong agreement i'm not likely to support it. another question to the deputy city attorney, if we do not agree with this, you know, amendment to the agreement with the pga can we ask that it come back to us and have a better -- can we negotiate in, amend in, a threshold that's lower for the percentage of revenue that the rec and park can get from hosting the tour? >> deputy city attorney john gifford. the board can't require that amendment. you
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can reject this contract, reject the resolution, you can continue it and if rec and park wants to renegotiate and come back -- but if you don't feel comfortable with the contract that's before you those are your two options. >> okay, thank you. no further questions. >> i'm going to turn to supervisor mar in a second, but mr. rose can i ask you a few questions, because i appreciate this conversation. i want to frame this however because there was conversation around the america's cup versus this. we are getting reimbursed for costs associated with the tournament. >> that is correct. >> and we did not with the america's cup. >> that is absolutely correct. >> and your questioning is should we not just recover our costs but should we share in the revenue upside. >> right. just to give you a little history on that, mr. chairman, when this agreement
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first came we, i believe we had comments on our report at that time or raised questions about how realistic was the threshold, were we ever going to -- were we going to get any revenues. as it turns out historically we've never gotten any percentage of revenues. i'm not blaming anybody, i'm saying the threshold was just too high. so the benefit, the real beneficiary in terms of millions of dollars worth of revenues that are generated is the pga >> okay, i guess two other things. no. 1, and i appreciate we haven't hit that bogey yet and may not with this tournament in the future and that may be the case, i think there's a separate discussion i think supervisor avalos touched on, there's a golf fund deficit if you will. harding park has a certain percentage allocated
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to it. we can have a broader discussion on whether that's the right thing for the city of san francisco and what we're talking about today is getting cost recovery for puting on a tournament. >> right, and that course recovery includes all of our lost revenues because it's closed. >> last one, and i appreciate this question, no documentation on the multiplier effect and i am very much with supervisor avalos, big economic reports right now, i think we should take a fine-toothed comb to them given what happened with the america's cup. that being said, generickally speaking, if we say hotel revenue, the rooms might be full already so we don't document it. supply and dmrapbd would dictate if there's that much demand hotel prices will go up and we will get a bigger share of that revenue, correct? >> yes, that is absolutely possible. >> thank you. supervisor mar >> yeah, i appreciate the budget analyst's objectivity and i think this is a really good report that i'm glad
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supervisor avalos is raising these questions and thank you to supervisor farrell for helping to frame it as well. i hope that miss patricione and the rec and park department will look at a future economic report on the economic benefits but also the costs to the city of events like the pga tour. i wanted to go back to another planet entertainment and outside lands events in gold engate park. i know there was an independent sf state study that looked at economic benefits that we use that is helping the economy of the city but also another planet entertainment is giving back tremendously to the recreation and parks department. i don't see the pga tour doing the same. i'm wondering if you considered lowering that
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threshold that the budget analyst suggested so that the pga tour can help to deal with the 2.4 million for harding and the 5 million overall for the city that's subsidizing golfing in our city. >> supervisors and mr. rose, i would like to mention that hosting these large events at harding park and also to address the fact that our maintenance standards at harding are higher as a result of the tour events coming, have resulted in us being able to charge much higher fees at harding park on a yearly basis. we're projected to bring in over 7.2 million in revenue at harding park this year. we recently ran some numbers and our net operating income so far this fiscal year is 12.1 percent higher than it was last year and our rounds have increased 16.9 percent after the announcement of these upcoming events. there's a tremendous amount of buzz, especially not only from residents but from bay area residents and from people from out of town wanting to play a championship course. so although this is very
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difficult to calculate specifically we feel that this does give back to harding park for future during months that tournaments are not played because we have established a reputation of being a first class golf course that people want to play. people that we may not have gotten without the tournament. >> so can i just ask miss patriocone if there's consideration of lowering the tloerb hold so people can recoup some of the expenses subsidizing golfing but even more moderate cost golf courses from lincoln park to the other courses that are in our city? >> we could certainly go back and approach that subject to them. the pga tour incurs a great number of expenses
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promoting and presenting events in san francisco directly with fire, parking, police, various other things, so the city, they do spend a great deal of money that the city benefits from to present these events. i can't give you an answer as to how successful that would be, but if that's the direction i would go back to them and discuss it with them. >> thank you. okay, if no other questions we'll open this up for public comment. anybody wish to comment on items 1 or 2? please step forward. okay, seeing none, public comment is closed. so, colleagues, we have these two items in front of us. we have one recommendation from our budget analyst. may i suggest before we even have a discussion on it overall can we accept the budget analyst's recommendations? it's to have
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rec and park request expense reimbursements within 60 days. >> yes. >> we can take that without objection. colleagues, on the underlying items, discussion , supervisor avalos. >> yes, i appreciate the budget analyst's report and the work of rec and park bringing in the pga tour. i think it's a significant event that the world will be watching. i don't think that it's -- has the right feel for what the agreement should be between the rec and park agreement and the pga and i would like to see if we can get a better agreement, one with a lower threshold that would share revenue from the pga tour event, so i would like to motion that we continue the item to the, you know, maybe the end of january, i'm not sure if i'm going to be on the budged committee at that point, i hope so, and let me give a date for that. or i can just say continue to the call of the
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chair would be fine so that we can come back and hear that we can get a better arrangement between the rec and park department and the pga we can't offer an amendment to the actual agreement itself. we don't have the ability to do that, we just have an up or down vote, so i would like to see if we could have a better arrangement moving forward. i appreciate the work that will be done on that. >> i will second that. >> given that's going to happen, i'll go along -- i would just say i think of a bit of a different proech, and i appreciate this. i am an awful golfer and an awful bowler, by the way, for that matter, too, but i do, i have seen the benefits of having harding here in the city of san francisco on the part of our golf committee, for our residents here, for tourism, it is a jewel here within our city and this deal from my perspective that we're getting full cost recovery, not to mention all the potential
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ancillary benefits that are not articulated to be sure but i would be wary anyway, all these multiplier effects, putting so much faith in them. at the same time we are getting full cost recovery for putting on a great tournament like this. i think to be quite frank would you with you it would be foolish not to do it but i understand the comments and we will continue to do it. >> the tournament is scheduled to happen at the end of april and, to be honest with you, we are well in the throes both on the pga tour side of selling the tournament and on the department side of performing the maintenance that is associated with the tournament. to defer approval of the agreement until the end of january puts us in something of a bind. >> we can change it to the call of the chair so we can do it as soon as possible, we can do special meetings, we can call it back as early as possible so it's not to a date certain, it's to as soon as we
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can hopefully have further conversations. okay, so we have a motion by supervisor avalos to continue items 1 and 2 to the call of the chair as amended, seconded by supervisor mar, we will take that without objection. madam clerk, please call item 18. >> item no. 18 is a resolution authorizing the general manager of the sf puc to execute a master license agreements for outdoor distributed and tennis system pole installation between the city systems and gte mobile nets of california 74 rise upb wireless each for a term of 12 years, each following board approval. >> thank you, we have barbara hale it from our puc to speak. >> barbara hale, general assistant for purchase at the san francisco public utilities commission. i am here today seek authorization for a master license agreement for outdoor
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distributed antenna systems mounted on our street light poles. those are assets that the city owns through the public utilities commission. first off what is a distributed antenna system? the systems are installations that consist of multiple power, low power antennas that are connected by fiber optic lines to the carrier hubs via fiber optic lines. the facilities include antennas, radio transmiters, fiber optic cables and associated electrical infrastructure. so that's what the physical assess is. what do these things do? they distribute wireless network coverage, enhance wireless cellular and data capacity in heavy trafficked areas and really provide for better service where more traditional cell tower installation is inappropriate.
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the slide that you see here gives you a picture of what they look like physically in the environment. the antenna itself is the device that's circled in red at the top of the pole. this is just an example of the kinds of systems the carriers are proposing. so we are --. >> just a question on that. that to me is a very illustrative photo so is that something that we would expect to see or in reality they could be something very different from that? >> in reality it should look very similar to this. we're expecting to see things very similar to this. exactly, not necessarily because there's a number of carriers. some carriers have --. >> in terms of size. >> in terms of size and overall aesthetic. you know, this is what we're expecting to see. we have seen some other ideas come across our and planning's desk that looked bad relative to this


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